A work center uses kanban containers that hold 200 parts. To produce enough parts to fill a container, 60 minutes of setup plus run time are needed. Moving the container to the next workstation, waiting time, processing time at the next work station, and return of the empty container take 120 minutes. There is an overall demand rate of 10 units per minute. Calculate the number of containers needed for this process.

Answers

Answer 1

Answer:

9 containers

Explanation:

Data given

Container holds (capacity) = 200 units

Demand rate per minute = 10 units

The computation of number of containers needed is shown below:-

Time to fill container = Setup time + Processing time

= 60 + 120

= 180 minutes

Number of containers (n) = (Demand × Time to fill container) ÷ Capacity of the container

= (10 × 180) ÷ 200

= 1,800 ÷ 200

= 9 containers

Therefore for computing the number of containers we simply applied the above formula.


Related Questions

Donovan company incurred the following costs while producing 2000 units: Direct Materials, $15 per unit; direct labor, $5 per unit; variable manufacturing overhead, $12 per unit; variable selling and administrative costs, $14, per unit; total fixed overhead costs, $20,000; total fixed selling and administrative costs, $10,000. There are no beginning inventories.

What is the unit productive cost using absorption costing?

a. $32 per unit

b. $42 per unit

c. $52 per unit

d. $61 per unit

What is the unit product cost using variable costing?

a. $32 per unit

b. $44 per unit

c. $46 per unit

d. $61 per unit

What is the operating income using absorption costing if 1800 units are sold for $100 each?

a. $104,400

b. $96,000

c. $79,200

d. $69,200

What is the operating income using variable costing if 1900 units are sold for $100 each?

a. $57,400

b. $72,600

c. $80,200

d. $102,600

*Formulas or explanations with each part of the problem.

Answers

Answer:

1. b. $42 per unit

2. a. $32 per unit

3. d. $69,200

4. b $72,600

Explanation:

1 and 2 The computation of unit productive cost using absorption costing and unit product cost using variable costing is shown below:-

                                     Absorption        Variable

Direct material                   $15                   $15

Direct labor                         $5                    $5

Variable manufacturing

overhead                             $12                  $12

Fixed manufacturing

overhead                              $10        

($20,000 ÷ 2000)  

Product cost                        $42                $32

Therefore for computing the product cost of absorption and variable cost we simply added direct material, direct labor, variable manufacturing overhead and fixed overhead rate

3. The computation of the unit product cost using variable costing is shown below:-

Sales                                          $180,000

Cost of goods manufactured   ($756,00)

(1800 × $42)

Difference                                   $104,400

Variable and selling

administrative                             ($25,200)

(1800 × $14)

Gross profit                                  $79,200

Fixed selling and administrative

expenses                                     ($10,000)

Net operating income                $69,200

So, for computing the net operating income we simply deduct the Fixed selling and administrative expenses from gross profit.

4. The computation of operating income using variable costing is shown below:-

Sales                                               $190,000

(1,900 × $100)

Variable cost of goods

manufactured                                   $60,800

(1,900 × $32)

Gross contribution margin                $129,200

Variable and selling administrative   ($26,600)

(1900 × $14)

Net contribution margin                     $102,600

Fixed cost                                           ($30,000)

Operating income                              $72,600

Therefore for computing the operating income using variable costing we simply deduct the fixed cost from net contribution margin.

A company can sell all the units it can produce of either Product A or Product B but not both. Product A has a unit contribution margin of $16 and takes two machine hours to make and Product B has a unit contribution margin of $30 and takes three machine hours to make. If there are 5,000 machine hours available to manufacture a product, income will be:

a. $10,000 more if Product A is made.
b. $10,000 less if Product B is made.
c. $10,000 less if Product A is made.
d. the same if either product is made.

Answers

Answer:

Product B has a net income of $10,000 superior to Product A.

The correct answer is C.

Explanation:

Giving the following information:

Product A:

Unitary contribution margin= $16

Machine-hours required= 2

Product B:

Unitary contribution margin= $30

Machine-hours required= 3

First, we will calculate the total income of both products.

Product A= 16*(5,000/2)= $40,000

Product B= 30*(5,000/3)= $50,000

Product B has a net income of $10,000 superior to Product A.

Wicker Rockers, Inc. is planning to offer a defined contribution plan for its employees. The company would like to incorporate a "cliff" vesting schedule for the employer contributions into the plan. What is the minimum vesting period the company can choose for a "cliff" vesting schedule

Answers

Answer:3 years

Explanation:

Cliff vesting is when an employee of a company becomes fully vested on a specified date rather than the employee becoming partially vested in increasing amounts over extended period. Cliff Vesting is a process whereby the employees are entitled to full benefits from their firm’s pension policies and qualified retirement plans on a given date.

Upon the completion of the cliff period, employees receive full benefits. The Pension Protection Act of 2006 deduced a three-year cliff vesting schedule for the designated defined-contribution plans which includes 401Ks.

Darrin’s Auto Northern Division is currently purchasing a part from an outside supplier. The company's Southern Division, which has no excess capacity, makes and sells this part for external customers at a variable cost of $15 and a selling price of $27. If Southern begins sales to Northern, it (1) will use the general transfer-pricing rule and (2) will be able to reduce variable cost on internal transfers by $3. On the basis of this information, Southern would establish a transfer price of:

Answers

Answer:

Transfer price = $24

Explanation:

As per the data given in the question,

The excess capacity of Company's Southern division is nill therefore for transferring the units the division will have to decrease its external sales.The Loss occurred due to reduction in external sales should be from inter divisional transfer price. Therefore,

Transfer price = variable cost + Loss of contribution

= ($15 - $3) + ($27 - $15)

= $24

g Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $276,000 and credit sales are $1,000,000. An aging of accounts receivable shows that approximately 3% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,200 before adjustment?

Answers

Answer:

accounts receivable = $276,000

total credit sales = $1,000,000

3% of accounts receivable will not be decollete = $276,000 x 3% = $8,280

if allowance for doubtful accounts has a credit balance of $2,200, you must add = $8,280 - $2,200 = $6,080

the adjusting entry should be:

Dr Bad debt expense 6,080

    Cr Allowance for doubtful accounts 6,080

Since allowance for doubtful accounts is a contra asset account it has a credit balance that reduces the value of accounts receivable.

Your client has $80,000 invested in stock A. She would like to build a two-stock portfolio by investing another $80,000 in either stock B or C. She wants a portfolio with an expected return of at least 15% and as low a risk as possible, the standard deviation must be no more than 25%. Expected Return Standard Deviation Correlation With A A 18% 30% 1.0 B 17% 25% 0.3 C 15% 15% 0.4_____

Answers

Answer: Please see below for answer

Explanation:

Expected Return  Standard Deviation   Correlation With A  

 A 18%                         30%                        1.0  

B     17%                       25%                         0.3

C   15%                     15%                              0.4_____

Expected return of A (RA) = 18%

Expected return of B (RB) = 17%

Standard Deviation of A (σA) = 30%

Standard Deviation of B (σB) = 25%

Weight of A (WA) = 50% (Since equal amount of $80,000 is being invested)

Weight of B (WB) = 50%

Correlation = 0.3

Portfolio Returns = WARA + WBRB = (18%*50%) + (17%*50%) = 17.5%

Portfolio Standard Deviation = (WA2 * σA2 + WB2 * σB2 + 2*(WA)*(WB)*CorrelationAB* σA* σB)(1/2)

= [(50%2 X 30%2) + (50%2 X 25%2) + (2 X 50% X 50%X 0.3 X 30% X 25%)](1/2)

=0.0025 +0.015625+SQR 0.01125

=0.0025+0.015625+0.1061=0.1241= 12.4%

If Invested in Stock C

Expected return of A (RA) = 18%

Expected return of C (RC) = 15%

Standard Deviation of A (σA) = 30%

Standard Deviation of C (σC) = 15%

Weight of A (WA) = 50% (Since equal amount of $80,000 is Being invested)

Weight of C (WC) = 50%

Correlation = 0.4

Portfolio Returns = WARA + WCRC = (18%*50%) + (15%*50%) = 16.5%

Portfolio Standard Deviation = (WA2 * σA2 + WC2 * σC2 + 2*(WA)*(WC)*CorrelationAC* σA* σC)(1/2)

= [(50%²X 30%²) + (50%² X 15%²) + (2 X 50% X 50%X 0.4 X 30% X 15%)]^1/2

=  0.0025+0.005625+ SQR 0.009= 0.1029= 10.29%= 10.3%

The  expected return and standard deviation  if invested in Stock B is 17.5% and  12.4% while that of  STOCK C is 16.5% and 10.2 % but the client wants  expected return of at least 15% and at low risk as possible with standard deviation not more than 25%, it is advised that the client invest in stock C as the values obtained are more towards her choice.

Exercise 24-1 Payback period computation; uneven cash flows LO P1 Beyer Company is considering the purchase of an asset for $180,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Year 1 Year 2 Year 3 Year 4 Year 5 Total Net cash flows $ 60,000 $ 40,000 $ 70,000 $ 125,000 $ 35,000 $ 330,000 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal place.)

Answers

Answer:

3.08 years

Explanation:

The computation of payback period is shown below:-

Payback period = Year up to which cumulative cash flow are negative + (Cumulative cash flow in period in A  ÷ cash flow of immediately year succeeding the period in A )

Year    Cash flow      cumulative cash flow

0          ($180,000)        ($180,000)

1            $60,000          ($120,000)

                            ($180,000 - $60,000)

2           $40,000           ($80,000)

                           ($120,000 - $40,000)

3           $70,000           ($10,000)

                           ($80,000 - $70,000)

4          $125,000           $115,000

(it will be end here because it excess from here)

Now we will put it into formula

Pay back period = 3 + (10,000 ÷ 125,000)

= 3 + 0.08

= 3.08 years

On December 31, 2017, Berclair Inc. had 560 million shares of common stock and 5 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 168 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2018. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $1,050 million.
Also outstanding at December 31 were 30 million incentive stock options granted to key executives on September 13, 2013. The options were exercisable as of September 13, 2017, for 30 million common shares at an exercise price of $56 per share. During 2018, the market price of the common shares averaged $70 per share.
Required:
a. Compute Berclair's basic and diluted earnings per share for the year ended December 31, 2018.

Answers

Answer:

Basic Earnings Per Share  = $1,44

Diluted Earnings Per Share = $1,38

Explanation:

Basic Earnings Per Share = Earnings Attributable to Holders of Common Stock / Weighted Average Number of Common Shares

Calculation of Earnings Attributable to Holders of Common Stock

Net income for the year ended December 31, 2018,  $1,050,000,000

Less cumulative preferred stock dividend                      ($45,000,000)

Earnings Attributable to Holders of Common Stock    $1,005,000,000

Calculation of Weighted Average Number of Common Shares

1 January Outstanding Common Shares                        560,000,000

March 1 - Purchases (10/12×168,000,000)                       140,000,000

October 1 - Sold (3/12×4,000,0000)                                    (1,000,000)

Weighted Average Number of Common Shares            699,000,000

Basic Earnings Per Share = $1,005,000,000/699,000,000

                                            = $1,44

Diluted Earnings Per Share = Adjusted Earnings Attributable to Holders of Common Stock / Adjusted Weighted Average Number of Common Shares

Calculation of Adjusted Weighted Average Number of Common Shares

Weighted Average Number of Common Shares (Basic)            699,000,000

Incentive Stock Options                                                                  30,000,000

Adjusted Weighted Average Number of Common Shares        729,000,000

Diluted Earnings Per Share = $1,005,000,000/ 729,000,000

                                               = $1,38

A company's income statement showed the following: net income, $117,000; depreciation expense, $31,500; and gain on sale of plant assets, $5,500. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,700; merchandise inventory increased $19,500; prepaid expenses increased $6,500; accounts payable increased $3,700. Calculate the net cash provided or used by operating activities. Multiple Choice $143,400. $141,400. $148,200. $130,400. $169,400.

Answers

Answer:

$130,400

Explanation:

The computation of net cash provided or used by operating activities is shown below:-

Net cash provided or used by operating activities

Net income                                   $117,000

Depreciation expense                  $31,500

Gain on sale of plant assets           ($5,500)

Accounts receivable decreased     $9,700

Increase inventory                           ($19,500)

Prepaid expenses increased          ($6,500)

Increase account payable                $3,700

Net cash flow from

operating activities                          $130,400

Therefore the Net cash flow from operating activities is $130,400

The conversion rate is restated for all stock dividends and splits. Coffee had the following stock transactions in 2005 and 2006:

1/1/2005 - Sold 30,000 shares of common stock at $20 per share.
1/1/2005 - Sold 10,000 shares of preferred stock at $100 per share.
4/1/2005 - Issued at 50 percent stock dividend when the market price is $26 per share.
9/1/2005 - Purchased 4,000 treasury shares at $30 per share.
10/1/2005 - Sold 1,000 of the treasury shares at $32 per share.
11/1/2005 - Sold 2,000 of the treasury shares at $25 per share.
12/1/2005 - Issued a 2-1 for stock split.
12/20/2005 - Declared the required dividend to preferred stock holders and a $.25 per share dividend to common stockholders. Dividends are payable on 12/31/2005.

Prepare journal entries to record all of the above business events

Answers

Answer and Explanation:

The journal entries are shown below:

On Jan 1

Cash (30,000 Shares × $20)   $600,000

    To  Common Stock (30,000 Shares × $2)    $60,000

    To Paid In Capital in Excess of Par - Common Stock $540,000

(Being the sale of the common stock is recorded)

On Jan 1

Cash (10,000 Shares × $100)     $600,000

         To Preferred Stock (10,000 Shares × $100)  $1,000,000

(Being the sale of the preferred stock is recorded)

On Jan 4

Retained Earnings (30,000 × 50% × $26)   $390,000

         To Common Stock (15,000 shares × $2)   $30,000

         To Paid In Capital in Excess of Par - Common Stock $360,000

(Being the issued of the stock dividend is recorded)

On Jan 9

Treasury Stock (4,000 Shares × $30)   $120,000

        To Cash   $120,000

(Being the purchase of treasury stock is recorded)

On Jan 10

Cash (1,000 Shares × $32)   $32,000

   To  Treasury Stock (1,000 Shares × $30)  $30,000

     To Paid in Capital from Treasury Stock $2,000

(Being the sale of the treasury stock is recorded)

On Jan 11

Cash (2,000 Shares × $25)     $50,000

Paid in Capital - Treasury Stock   $2,000

Retained Earnings $8,000

           To Treasury Stock (2,000 Shares × $30)    $60,000

(Being the sale of the treasury stock is recorded)

On Jan 12

Since the shares are issued for  2 to 1 i.e the number of shares is rises from 29,000 shares to 58,000 shares due to which the par value is decreased from $2 to $1 per share. So the new 29,000 shares were to be distributed

On Dec 20

Retained Earnings  $74,500

     To Dividend Payable - Preferred Stock (10,000 Shares × 100 × 6%)    $60,000

     To Dividend Payable - Common Stock (58,000 Shares × $0.25)   $14,500

(Being the dividend is declared)

Running Co. had an equity investment where it owned less than 20% of an investee, and therefore Running Co. was not able to exercise significant influence. Information about the investment is below: 20X1 20X2 Investment cost 170,000 170,000 Fair value 181,400 155,000 Total unrealized gain (loss) 11,400 (15,000) The company sold the investment during 20X3 for the below price: Sales price 192,400 What is the gain (loss) recorded in the income statement in the year of sale, in 20X3

Answers

Answer:

Gain or Loss to be reocrded in Financial Statement: 151600 - 155000= 3400 loss to be booked as Fair value recorded in the books as in year ended 20X2 is 155000.

The following data pertain to last year's operations at Tredder Corporation, a company that produces a single product: Units in beginning inventory 0 Units produced 20,000 Units sold 19,000 Selling price per unit $100.00 Variable costs per unit: Direct materials $12.00 Direct labor $25.00 Variable manufacturing overhead $3.00 Variable selling and administrative $2.00 Fixed expenses per year: Fixed manufacturing overhead $500,000 Fixed selling and administrative $600,000 What was the absorption costing net operating income last year?

Answers

Answer:

Net operating income= 27,000

Explanation:

Giving the following information:

Units produced 20,000

Units sold 19,000

Selling price per unit $100.00

Variable costs per unit:

Direct materials $12.00

Direct labor $25.00

Variable manufacturing overhead $3.00

Variable selling and administrative $2.00

Fixed expenses per year:

Fixed manufacturing overhead $500,000

Fixed selling and administrative $600,000

Under the absorption costing method, the fixed manufacturing overhead gets included in the unitary production cost. First, we need to calculate the unitary product cost.

Unitary product cost= (12 + 25 + 3) + (500,000/20,000)

Unitary product cost= 40 + 25= $65

Income statement:

Sales= 100*19,000= 1,900,000

COGS= 65*19,000= (1,235,000)

Gross profit= 665,000

Variable selling and administrative= (2*19,000)=(38,000)

Fixed selling and administrative= (600,000)

Net operating income= 27,000

An outside supplier has offered to provide the annual requirement of 7,200 of the parts for only $13 each. The company estimates that 60% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:

Answers

Super corporation produces a part in the manufactures of its product. The unit cost is $21 computed as follows:

An outside supplier has offered to provide the annual requirement of 7,200 of the parts for only $13 each. The company estimates that 60% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:

                                                                        $

Direct material                                                 6

Direct labour                                                    8

Variable manufacturing overhead                2

Fixed manufacturing overhead                     5

Total cost                                                        21

Answer:

Total financial advantage of buying from the supplier $43,200

Explanation:

Unit relevant variable  cost of making= 6+8 +2 = 16

                                                                                    $

Variable cost of making (   16×    7200) =             115,200      

Variable of buying           (13   ×7200)                    93,600

Savings in variable cost                                         21,600

Savings in fixed cost  (60%*72300 × 5)                 21600

Total savings from buying                                   43,200

 Total financial advantage of buying from the supplier $43,200

Under the allowance method of accounting for uncollectible accounts, a. the cash realizable value of accounts receivable is greater before an account is written off than after it is written off. b. Bad Debts Expense is debited when a specific account is written off as uncollectible. c. the cash realizable value of accounts receivable in the balance sheet is the same before and after an account is written off. d. Allowance for Doubtful Accounts is closed each year to Income Summary.

Answers

Answer:

c. the cash realizable value of accounts receivable in the balance sheet is the same before and after an account is written off.

Explanation:

Under the allowance method of accounting for uncollectible accounts, the cash realizable value of accounts receivable in the balance sheet is the same before and after an account is written off and bad debt expenses is debited.

This means that in the period in which an account previously written off is collected, the income is unaffected.

Also, under the allowance method of accounting, total assets will remain unchanged when a particular account is being written off.

Purdum Farms borrowed $16 million by signing a five-year note on December 31, 2017. Repayments of the principal are payable annually in installments of $3.2 million each. Purdum Farms makes the first payment on December 31, 2018 and then prepares its balance sheet. What amount will be reported as current and long-term liabilities, respectively, in connection with the note at December 31, 2018, after the first payment is made?

Answers

Answer:

Current liabilities   $3.2 million

long-term liabilities =$16 million-$3.2 million-$3.2 million=$9.6 million

Explanation:

The amount classified as current liabilities as at 31st December 2018 is the portion of the loan repayable within a year,that the repayment due at 31st December 2019 which is $3.2 million.

The amount to be classified as long term liabilities is the balance of the loan after having taken out the payment in year 1 as well as the repayment to be made in year 2

The predetermined overhead rate for Zane Company is $5, comprised of a variable overhead rate of $3 and a fixed rate of $2. The amount of budgeted overhead costs at normal capacity of $150000 was divided by normal capacity of 30000 direct labor hours, to arrive at the predetermined overhead rate of $5. Actual overhead for June was $9500 variable and $6050 fixed, and standard hours allowed for the product produced in June was 3000 hours. The total overhead variance is

Answers

Answer:

Total Overhead Variance= $500 unfavorable

Explanation:

The total overhead variance is the difference between actual overhead and the applied overhead.

Actual Overhead = Variable + Fixed= $9500 + $6050= $ 15,550

Budgeted Overhead for 30000 direct labor hours = $ 150,000

Applied Overhead for 3000 hours = 3000 *$5= $15000

Total Overhead Variance= Actual Overhead Less Applied Overhead

                                    = $15,500- $ 15000= $500 unfavorable

As actual is greater than applied it is unfavorable.

Answer:

$550 unfavorable.

Explanation:

Total actual overhead = $9,500 + $6,050 = $15,550

Total predetermined overhead = Predetermined overhead rate * Standard hours = $5 * 3,000 = $15,000

Total overhead variance = $15,550 - $15,000 = $550 unfavorable.

Note: It is unfavorable because total actual is greater than total predetermined overhead.

EHW Office Supplies, Inc. uses the perpetual inventory system. On September 4, 2019,EHW sold merchandise inventory on account at a price of $50,000 with payment terms of 1/10, n/30. The merchandise cost EHW $40,000. On September 12, 2019, the customer pays the proper amount due for the merchandise based on the credit terms. How much will be credited to Accounts Receivable when recording the collection

Answers

Answer:

$50,000

Explanation:

The cash payment was made within the discount period of 10 days,hence the amount received in respect of the sales on account is face value minus discount of 1%.

When sales was made EHW would have debited accounts receivable with $50,000 and credited same to sale revenue.

Cash received=$50,000*(1-1%)=$49,500

discount =$50,000-$49,500=$500

The appropriate entries for cash collection:

Dr cash    $49,500

Dr discount allowed  $500

Cr accounts receivable    $50,000

Library, Inc. has 2,500 shares of 4%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2017, and December 31, 2018. The board of directors declared and paid a $3,000 dividend in 2017. In 2018, $18,000 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2018?

Answers

Answer:

preferred stocks = 2,500 stocks x 4% x $50 par value = $5,000 preferred dividends per year

common stock = 50,000 stocks outstanding of $1 par value

in 2017, $3,000 in dividends are distributed, all to preferred stocks

In 2018, $18,000 in dividends are distributed, $7,000 to preferred stock ($2,000 cumulative from last year and $5,000 from this year) and $11,000 are distributed to common stockholders.

In 2018, each preferred stock received = $7,000 / 2,500 stocks = $2.80 per preferred stock. Each common stockholder received $11,000 / 50,000 = $0.22 per common stock.

Tom, Dan and Phil work indifferent teams at Springfield Automotive. Tom's team ensures that all the raw materials, machinery, tools and other production equipment are available for the employees around the clock. Any procurement needs have to be addressed to Tom, who also takes part in high-level decisions regarding the number of units to produced, exported and so on. Dan works as part of a team of eight members who concentrate the day-to-day productions; they also ensure that the quality checks are done and inspect each other's work. Phil is the operations manager, who works for 5 hours in the production department and then spends the rest of his time assisting management as an internal consultant on manufacturing issues. His input is crucial in improving the production process. Dan's contribution is toward the __________.

Answers

Answer: Work team

Explanation: Dan's contribution is towards the work team whereas Phil works in the parallel team while Tom is part of the management team. a work team which Dan is a member of is defined as a group of workers or employees with different set of skills that work together on a given task such as the day-to-day productions in a business, quality control and inspection, etc. Work teams are most efficient or useful where there is a frequent change in job content and employees with limited skills and a specific set of duties are unable to cope (work teams thus provide expert advice that will increase the ability of employees to participate in planning, problem-solving, and decision-making that are needed to complete a set of work and to better serve customers).

Suppose that SoS sells both versions and wants to charge different prices for different versions. What is the highest price of the bluetooth version for the high-valuation buyers? (Hint: Since low-valuation buyers will not have an incentive to buy the more expensive version, the highest price of the stripped-down version for the low-valuation buyers is equal to their willingness to pay, i.e., pL = $250)

Answers

Answer:

Check the explanation

Explanation:

Since the high valuation customers are willing to pay $500 for the Bluetooth headphones, that price should be set for the Bluetooth versions. The problem will arise if the high valuation customers shift to the stripped down version as well. However, since they care for the Bluetooth versions and stripped down versions separately, it is highly likely that they will prefer the Bluetooth headphones.

So the highest price that can be set for the Bluetooth headphones for the high value buyer will be $500.

5) If the price is set at $500 for high value customers and $250 for low value customers, total profit can be given as

Profit = 1,000,000 * (250 - 100) + 800,000 * (500 - 100)

Profit = 150,000,000 + 320,000,000 = $470 million

The common stock of Leaning Tower of Pita Inc., a restaurant chain, will generate payoffs to investors next year, which depend on the state of the economy, as follows: Dividend Stock Price Boom $ 10 $ 200 Normal economy 6 90 Recession 0 0 The company goes out of business if a recession hits. Assume for simplicity that the three possible states of the economy are equally likely. The stock is selling today for $80.
a. Calculate the rate of return to Leaning Tower of Pita shareholders for each economic state. (Negative amounts should be indicated by a minus sign. Enter your answers as a percent rounded to 2 decimal places.) Rate of return Boom Normal economy Recession a-2.
b. Calculate the expected rate of return and standard deviation of return to Leaning Tower of Pita shareholders. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Expected return Standard deviation

Answers

Answer:

a) Boom = 162.50%

Normal =20.00%

Recession = - 100.00%

b) Expected return = 27.50%

Standard deviation = 107.30%

Explanation:

a) To find the rate of return for each economy state, let's use:

Rate of return = (Dividend +Stock price next year-stock price today)/stock price today

i) For Boom:

[tex] \frac{10 + 200 - 80}{80} = 1.625 [/tex] = 162.50%

ii) Normal:

[tex]\frac{6 + 90- 80}{80} = 0.2 [/tex] = 20.00%

iii) Recession :

[tex]\frac{0 + 0 - 80}{80} = - 1 [/tex] = -100%

b) To calculate the expected rate of return, let's use:

Expected return = Sum of expected return in different scenario / number of economy states

[tex] = \frac{162.5 + 20 - 100}{3} = 27.50[/tex]

Standard deviation:

To find the standard deviation, let's use:

Standard deviation = √[(sum of square of expected return in each scenario -average return)/n]

[tex] = \sqrt{\frac{(162.50-27.50)^2+(20-27.50)^2+(-100-27.50)^2}{3}} [/tex]

[tex] = \sqrt{\frac{(135)^2 + (-7.50)^2 + (-127.50)^2}{3}} [/tex]

[tex] = \sqrt{\frac{18225+56.25+16256.25}{3} [/tex]

= 107.30%

Standard deviation = 107.30%

Ahmed, a lawyer, sold his car to Carlos. Has an implied warranty of merchantability been created by this transaction? No, because Ahmed is not a merchant. Yes, because if the car is defective Carlos will have a right to return in to Ahmed. No, Ahmed has not implied so either orally or in written. Yes, because a car is "goods" and the Uniform Commercial Code applies to contracts for the sale of goods.

Answers

Answer:

A.  No, because Ahmed is not a merchant.

Explanation:

Implied warranty of merchantability is a law in contract which states that when there is a transaction between a seller (the merchant), and a buyer, there is an unwritten guarantee from the seller, that the product meets up to the ordinary standards of care. This means that the goods must be fit to do what the merchant says it will do.  Therefore, if the seller finds it defective, he could return it to the seller. and if the seller refuses to make a change, a legal case could be established. The merchant by law is a wholesaler or retailer, who sells goods in which he has expertise or special skills.

Ahmed in the question could be argued in court to not be a merchant of cars and as such, has no expertise with which he can make a guarantee for the car being sold to Carlos.

CSUSM is a zero growth company. It currently has zero debt and its earnings before interest and taxes (EBIT) are $85,000. CSUSM 's current cost of equity is 11%, and its tax rate is 21%. The firm has 15,000 shares of common stock outstanding. Assume that CSUSM is considering changing from its original capital structure to a new capital structure with 39% debt and 61% equity. This results in a weighted average cost of capital equal to 8.7% and a new value of operations of $576,345. Assume CSUSM raises $165,000 in new debt and purchases T-bills to hold until it makes the stock repurchase. What is the stock price per share immediately after issuing the debt but prior to the repurchase?

Answers

Answer:

Check the explanation

Explanation:

Calculation of CSUSM 's New value of Operation :

For the purpose of Calculation of New Value of Operation we need to first calculate new WACC

Given :

Debt value ( Wd) = 30% or 0.30

Equity Value ( We)= 70% or 0.70

Cost of Debt ( Kd) =8%

New cost of equity (Ke) =12%

WACC =Kd(1-T) * Wd + Ke* We

WACC =[8%(1-0.40) * 0.30] + [12% * 0.70]

= [4.80% * 0.30 ] + [8.4 %]

= 1.44% + 8.4%

= 9.84 %

Given EBIT = $ 80,000

Tax rate = 40%

Currently the company has no growth. Therefore growth rate is 0 %

Value of New Operation =FCF / WACC

=EBIT (1-T) / WACC

=$80,000 (1-0.40)/ 9.84%

= $ 487,804.88

At the beginning of last year, Tarind Corporation budgeted $900,000 of fixed manufacturing overhead and chose a denominator level of activity of 600,000 machine-hours. At the end of the year, Tari's fixed manufacturing overhead budget variance was $12,000 favorable. Its fixed manufacturing overhead volume variance was $19,200 favorable. Actual direct labor-hours for the year were 625,000. What was Tari's total standard machine-hours allowed for last year's output?

Answers

Answer:

The answer is 612800 hours

Explanation:

Solution

Recall that:

At the start of last year, Tari Corporation budgeted $900,000 of fixed manufacturing overhead and chose a denominator level of activity of 600,000 machine-hours.

At the end of the year, Tari's fixed manufacturing overhead budget variance was $12000 favorable. Its fixed manufacturing overhead volume variance was $19200 favorable. The direct actual labor-hours for the year were 625,000. What was Tari's standard total machine-hours allowed for last year's output?

Now,

The Budgeted at beginning of  the year =  $900,000

fixed manufacturing overhead for =  600,000 machine hours

Thus,

The Standard = $900,000 / 600,000 hours = $1.5 fixed overhead / machine/machining hour

So,

At end of year, manufacturing overhead volume was $19,200 favorable which means  that,

$19200 / $1.5 = 12800 additional hours.

Total Standard Machine Allowance Allowed for output = 600,000 +12800 = 612800 hours

Therefore, Tari's total standard machine-hours allowed for last year's output is 612800 hours

If  Tarind Corporation budgeted $900,000 of fixed manufacturing overhead and chose a denominator level of activity of 600,000 machine-hours. At the end of the year, Its fixed manufacturing overhead volume variance was $19,200 favorable. What Tari's total standard machine-hours allowed for last year's output will be is: 612,800 machine hours

Using this formula

Total standard machine-hours=Machine -hours level of activity+ [Fixed manufacturing overhead volume variance÷(Fixed manufacturing overhead÷ Machine -hours level of activity)]

Where:

Machine -hours level of activity=600,000

Fixed manufacturing overhead volume variance=$19,200

Fixed manufacturing overhead=$900,000

Let plug in the formula

Total standard machine-hours=600,000+[$19,200÷($900,000÷600,000)]

Total standard machine-hours=600,000+($19,200÷1.5)

Total standard machine-hours=600,000+12,800

Total standard machine-hours=612,800 machine hours

Inconclusion if Tarind Corporation budgeted $900,000 of fixed manufacturing overhead and chose a denominator level of activity of 600,000 machine-hours. At the end of the year, Its fixed manufacturing overhead volume variance was $19,200 favorable. What Tari's total standard machine-hours allowed for last year's output will be is: 612,800 machine hours

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Which is a short-term consequence of making a late payment on your bill

Answers

Answer:

Which is a short-term consequence of making a late payment on your bill? There will be a late fee added to the bill.

The short term consequences are the effects experienced for a short time. The short term consequence of default in the bill payment is the addition of late fees.

What is a bill?

The bill can be given as the statement regarding the money owned by the user for the goods and the services he uses.

The bill payment can be for the services such as electricity, water, food and many more. The short term consequence that can be related with the bill is one which can be resolved and not make the major loss to the individual.

The short term payment for the lack of paying the bill is the addition of the late fees.

Learn more about bill payment, here:

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Which of the following is true of a stock dividend? Multiple Choice It is a liability on the balance sheet. The decision to declare a stock dividend resides with the shareholders. Transfers a portion of equity from retained earnings to a cash reserve account. Does not affect total equity, but transfer amounts between the components of equity. Reduces a corporation's assets and stockholders' equity.

Answers

Answer:

Yes it is true that a stock dividend does not affect total equity.

Explanation:

A stock dividend is a non cash payment given to shareholders. Instead of cash, additional shares that is equivalent to the earnings that accrue is given to shareholders.

While this may increase the number of shares held, it does not affect total equity.

One of the benefits of stock dividends tax exemption and retained equity which translates to additional investment.

However, the additional; shares created could dilute the share prices.

Marle Construction enters into a contract with a customer to build a warehouse for $950,000 on March 30, 2018 with a performance bonus of $50,000 if the building is completed by July 31, 2018. The bonus is reduced by $10,000 each week that completion is delayed. Marle commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability July 31, 2018 65% August 7, 2018 5% August 14, 2018 5% August 21, 2018 The transaction price for this transaction, based on the expected value approach, is:_______.
a. $950,000
b. $995,000
c. $685,000
d. $652,500

Answers

Answer:

b. $995,000

Explanation:

The computation of the transaction price based on the expected value approach is shown below:

The formula is

= (Building cost of warehouse + bonus) × probability percentage

Date                                 Calculation                              Amount

July 31, 2018         ($950,000+$50,000) × 0.65    $650,000

August 7, 2018 ($950,000+$40,000) × 0.25           $247,500

August 14, 2018 ($950,000+$30,000) × 0.05          $49,000

August 21, 2018 ($950,000+$20,000) × 0.05   $48,500

Total                                                                    $995,000  

Since the bonus is reduced $10,000 each week so $10,000 is deducted for every delayed week

On January 1, a company issued and sold a $408,000, 9%, 10-year bond payable, and received proceeds of $403,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:

Answers

Answer and Explanation:

The Journal entry is shown below:-

Bond interest expense Dr, $18,610

         To Cash $18360

           To Discount on bonds $250

(Being first interest payment is recorded)

For recording the first interest payment we simply debited the bond interest expenses as it increased the expenses and we credited cash and discount on bonds as  it reduced the assets and the discount should be credited

Working Note

Total discount on bonds issued = Sold bonds - Received proceeds

= $408,000 - $403,000

= $5,000

Amortization of Semi Annual Discount = Total discount on bonds issued ÷ Number of periods

= $5,000 ÷ 20

= $250

Cash interest paid = Sold bonds × Interest rate × From Jan to June ÷ Total number of months in a year

= $408,000 × 9% × 6 ÷ 12

= $18,360

Total Interest expense = Cash interest paid + Amortization of Semi Annual Discount

= $18,360 + $250

= $18,610

You are given the following information about 2 accounts: Account 1 Time Account Value before transactions Deposit Withdrawal 0 100 0.25 110 X 0.75 120 3X 1 82 Account 2 Time Account Value before transactions Deposit Withdrawal 0 100 0.5 120 2X 1 140 You are also told that the dollar weighted return over the year on account 1 is i. If the time weighted return over the year on account 2 is also i, what are X and i

Answers

Answer:

Check the explanation

Explanation:

For account 1:

Dollar weighted investment = 100 for entire year + X for three fourth of the year - 3X for one fourth of the year = 100 + 3X/4 - 3X/4 = 100

Dollar return = Closing balance - opening balance - (Total deposit - total withdrawal) = 82 - 100 - (X - 3X) = 2X - 18

Hence, dollar weighted return = i = Dollar return / Dollar weighted investment = (2X - 18) / 100

Or, 100i = 2X - 18 Or, 50i = X - 9

For account 2:

Time weighted return: It has two components:

100 growing to 120 in 0.5 year

Immediately after deposit of 2X, the capital becomes 120 + 2X that grows to become 140 in the next 0.5 year

Hence time weighted return = 1 + i = 120 / 100 x 140 / (120 + 2X) = 168 / (120 + 2X) = 84 / (60 + X)

From the first equation, i = (X - 9) / 50

Hence, from second equation, 1 + i = 1 + (X - 9) / 50 = (41 + X) / 50 = 84 / (60 + X)

Hence, (60 + X).(41 + X) = 50 x 84

Hence, X2 + 101X + 2,460 = 4,200

Or, X2 + 101X - 1,740 = 0

It's a quadratic equation that can be factorized as:

(X - 15).(X + 116) = 0

Hence, X = 15

Hence, i = (X - 9) / 50 = (15 - 9) / 50 = 0.12 = 12%

The selling price of imported olive oil is $20 per case. Your cost is 15 Euros per case, and the exchange rate is currently 1.25, so it takes 1.25 Euros to buy $1. Your largest customer has ordered 15,000 cases of olive oil. How much is the pretax profit for this transaction?

Answers

Answer:

$120,000

Explanation:

According to the question, the selling price (S.P) i.e. amount to be sold, of one imported olive oil case is $20 while the cost price (C.P) i.e. amount it was purchased, is €15

Looking at the currencies of both prices, they are different. To make the currencies the same, we need to convert euros (€) to dollars ($).

Based on the exchange rate of €1.25 to $1 given in the question;

€15 will be 15/1.25 = $12.

Therefore, the C.P is $12 and the S.P is $20

A customer ordered 15,000 cases of olive oil. This means that the;

1) The cost price (C.P) will be $12 × 15,000 = $180,000

2) The selling price will be $20 × 15,000 = $300,000

In order to obtain the pretax profit, we subtract the cost price (C.P) from the selling price (S.P). That is, $300,000 - $180,000 = $120,000

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